Real estate investment trust (REIT) Strategic Hotels & Resorts Inc BEE 0.45% has purchased the Montage Laguna Beach resort for $360 million, the most ever paid for a hotel in the state of California. The deal for the luxury works out to a cost of about $1.4 million per room.
Betting On California Luxury
In a statement about the deal, Strategic Chairman and President Raymond Gellein explained the benefits of investing in luxury properties like Montage. “The Southern California market generally, and the coastal Orange County market specifically, have been among the highest-rated markets in the country and are poised to continue their strong growth.”
Last June, the REIT acquired Blackstone Group LP BX 1.58%‘s stake in the Hotel de Coronado near San Diego.
About The Resort
Built in 2003, the resort sits atop a bluff overlooking the Pacific Ocean. The resort offers meeting rooms and a spa for its guests, and it holds a five-star rating from Forbes.
Luxury resorts were hit very hard during the collapse of the housing bubble, as travelers cut back on vacations and frills, and real estate values plummeted. Now that the economy has regained its strength, luxury resorts have one again gained favor among investors.
The Montage is expected to draw an average of $600 per room per day throughout 2015.
About Strategic
Strategic specifically targets extremely upscale properties and luxury resorts such as the Montage. Their hotel holdings include brands such as Fairmont, Four Seasons, InterContinental,and Ritz-Carlton.
Montage is not the only hotel Strategic has purchased recently, but it is certainly the most expensive. According to Atlas Hospitality Group, only a select few hotels, including the Four Seasons Resort Hualalai in Hawaii and the Waldorf Astoria in New York, have sold for prices higher than Montage’s price of $1.4 million per room.
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